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Don't go broke—go public. As if to demonstrate the truth of the old saw, HomeStreet, a Seattle community savings bank under heavy supervisory restriction, its financial statements qualified on a going-concern basis, seems bent on doing an initial public offering.

The 90-year-old franchise functioned as the private domain of generations of Seattle's Williams clan, whose members still sit on the board. The bank, with branches in Washington state, Portland, Ore., and Hawaii, is an "icon" of the Pacific Northwest, says new CEO Mark Mason. He has hired FBR Capital to help raise $180 million by selling 7.8 million shares of common, under the ticker symbol HMST, for an average price of $23.

IPObsessed: A Seattle community savings bank under heavy supervisory restriction is bent on selling shares to the public.
William Waitzman for Barron's

The bank has come a long way. Net income for the June 30 quarter was $1.3 million, or 95 cents a share, versus a loss of $9.4 million a year earlier. But it still has $194 million in nonperforming loans, 8.67% of its $2.2 billion in assets.

IPOdesktop called HomeStreet "a bank turnaround that hasn't turned around," one whose future was "in doubt" without a big cash infusion. The IPO was postponed Aug. 9, owing to the fading market. But capital needs may press HomeStreet to return. A spokesman would say only that the prospectus is current.

HomeStreet has spent nearly three years responding to the demands of multiple regulators, enhancing the infrastructure, shedding bad assets and implementing revised lending standards. But it still needs to raise about $115.3 million. "There are just too many good places for an investor to put fresh capital," says Dory Wiley, president of Dallas-based Commerce Street Capital. "I'm afraid I'd pass on this one."

-- Jack Willoughby

Last Week: Review

At a Standstill

U.S. employment growth faltered unexpectedly in August, with nonfarm payrolls unchanged and the jobless rate steady at 9.1%. August's results were the worst in nearly a year, as the government kept cutting jobs and the private sector added only 17,000 jobs. Data for the previous two months were revised lower by 58,000. Some economists expect the disappointing report will lead to a new round of Fed asset purchases—QE3—when it meets in late September. Investors piled into Treasuries and gold, which rose 12.3% in August alone.

A Battle at the Fed

Federal Reserve policy makers diverged sharply in their approach to the economy at the last meeting, minutes showed. Some doves favored more aggressive stimulus action, while three dissenters were unconvinced action "would likely do much to promote faster" recovery.

Coming Out Swinging

Christine Lagarde, the new chief of the International Monetary Fund, told central bankers at the Fed's Jackson Hole conference that the fragile recovery is at risk of being derailed and that the public isn't assured by policy makers' response. Lagarde's call for mandatory capitalization of European banks was rejected by politicians in Europe.

Taken by Storm

Hurricane Irene slammed the U.S. East Coast, killing some 46 people and leaving thousands of homes flooded and without power.

In Brief

• Libya's Moammar Gadhafi called for a guerrilla war against rebel forces in control of the country.